How Does The 2024 Autumn Budget Impact Me?

Written By Ben Tooke

In a historic moment, Chancellor Rachel Reeves has delivered the UK’s first Labour budget in over a decade, marking a new fiscal direction aimed at supporting households, ensuring healthcare accessibility, and driving economic growth. The announcement brought about minimal changes to most individuals' personal tax affairs; however, there have been other changes to legislation elsewhere. We have highlighted some of the key aspects that we believe will impact our clients.

Taxation & Revenue Measures

Labour has committed to no increases in National Insurance Contributions (NIC), VAT, or income tax for “working individuals.” However, it is important to note that tax thresholds will remain frozen until 2028. These thresholds are set to increase after this point and will increase at the rate of inflation. This means that the point at which people pay higher taxes will be increased. While the impact on working individuals has been relatively low, the government are introducing revenue-raising measures targeting businesses and high-income brackets. So what are the upcoming changes for businesses and high-income bracket individuals?

Employers’ NIC - From April 2025

  • Employer NI contributions will rise by 1.2%, from 13.8% to 15%.

  • The Secondary Threshold (the point at which employers start paying NIC) will reduce from £9,100 to £5,000.

  • Employment allowance increases from £5,000 to £10,500. For employers that qualify for the employment allowance i.e. most small businesses with more than one employee, this means that they will not be required to pay for the first £10,500 of employers’ national insurance contributions.

  • The government will also expand the Employment Allowance by removing the £100,000 eligibility threshold.

The example in red shows a business with 10 employees with an average salary of £35,830 (This is based on the latest government data from the Office for National Statistics)

Based on the example, we can see that for a business with 10 employees, with an average salary of £35,830, the employers’ national insurance tax liability will increase by £3,858.

Capital Gains Tax (CGT) - From 30 October 2024

This tax is charged on profits made from the sale of assets. Basic CGT rates will increase from 10% to 18%, and higher rates from 20% to 24%. These changes are in line with the current CGT rates for residential property. However, Business Asset Disposal Relief (BADR) will stay at 10% for this year, increasing to 14% in April 2025, and reaching 18% from 2026/27, preserving a notable difference compared to the higher CGT rate of 24%.

Pensions to be brought into Inheritance Tax (IHT) - From April 2027

Labour has announced that it will bring inherited pensions into the inheritance tax regime from April 2027. The current inheritance tax thresholds will be frozen until 2030 (previously 2028). This means the first £325,000 of an estate will remain exempt from tax. This exemption increases to £500,000 when a home residence is left to direct descendants, and up to £1 million when passed to a surviving spouse or civil partner.

Double-cab pickups to be treated as cars for tax

The Budget report quietly reveals that double-cab pickups will soon be taxed as cars, marking another policy reversal following similar back-and-forth decisions earlier this year. After initially designating these vehicles as cars in February and then reversing it, the government has now decided—eight months later—to reclassify them as cars for tax purposes.

The new taxation on double-cab pickups will take effect on 1 April 2025 for corporation tax and 6 April 2025 for income tax. From then, double-cab pickups will be taxed as cars for capital allowances, benefits in kind, and some business profit deductions.

What qualifies as a double-cab pickup?

According to the Employment Income Manual, a double-cab pickup has:

  • a front-passenger cab that contains a second row of seats and is capable of seating about four passengers, plus the driver

  • four doors capable of being opened independently, whether the rear doors are hinged at the front or the rear (two-door versions are normally accepted to be vans), and

  • an uncovered pickup area behind the passenger cab.

It means that models such as the Isuzu D-MAX, Ford Ranger and Toyota Hilux will be taxed as company cars and not commercial vehicles from April 2025.

N.B.

The Budget also allows transitional arrangements: double-cab pickups bought or leased before April 2025 will retain the previous tax treatment until lease end, disposal, or 5 April 2029.

Example: An employer placed an order for a double-cab pickup on 5 January 2025, but it was unavailable to the employer until 2 September 2025. As the agreement was entered into before 6 April 2025, the previous rules continue to apply until the earlier of disposal, lease expiry, or 5 April 2029.  

Housing and Real Estate Taxes

Stamp Duty Land Tax rates for additional properties will rise to 5% from October 2024, and the government plans to close loopholes that previously provided excessive relief for non-domiciled individuals. This shift is expected to generate £12 million for the Treasury by 2025.

Support for Workers & Social Security

  • Minimum Wage: Labour has accepted the Low Pay Commission’s recommendation to set the NMW at £12.21 per hour, with a £10 hourly rate for 16-18-year-olds.

  • State Pension: The state pension will rise by 4.1% in 2025-26, equating to an increase of approximately £470 annually. The pension credit standard minimum guarantee will also rise by 4.1% from around £11,400 per year to around £11,850 for a single pensioner.

  • Carer’s Allowance: Carers will receive up to £10,000 annually, providing essential support for caregivers.

Tackling Fraud and Modernising HMRC

In response to fraud in welfare systems, Labour plans to enhance fraud detection within the Department for Work and Pensions (DWP) and provide HMRC with updated systems and additional staff to modernise tax collection. Labour also pledged to crack down on umbrella companies and raise interest rates on overdue tax debts.

Other announcements included

Ben Tooke
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